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Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific
Update (December 2020)
Contents
1. Background and Overview
2. Overview of Provisions
3. Benefits and Implications
4. Procedure for Becoming a Party
5. More Information
Paperless Trade (Trade Digitalization)?
Paperless Trade
Conduct of trade activities on the basis of electronic rather than paper documents e.g., electronic Customs declaration, electronic cert. of origin
(application of e-commerce to international trade domain)
Paperless Trade Systems
Legal/regulatory and technical frameworks in which paperless trade transactions take place e.g., Digital customs system, electronic Single Window facility, e-port management systems, Framework Act on Electronic Transaction (in Republic of Korea)
Importer
Inspection
Customs
Benefits of Trade Facilitation & Paperless Trade
Effective & EfficientDeployment of
Resources
CorrectRevenue
Yield
ImprovedTrader
Compliance
EnhancedSecurity
IncreasedIntegrity &
Transparency
FasterClearance &
Release
PredictableApplication and
Explanation of Rules
Cutting Coststhrough
Reducing Delays
Effective & EfficientDeployment of
Resources
IncreasedTransparency
Trade Facilitation
& Paperless
Trade
TradersGovernment
Challenges to Moving forward on Cross-border Paperless Trade
International Standards
Harmonization of legal frameworks
Capacity gaps among the parties (infrastructure & HR)
Cooperation between public and private sectors
Lack of intergovernmental coordination mechanism
❑ A UN Treaty
✓ Open to interested (53) ESCAP member states (voluntary) to
become parties
✓ Enabling and action-oriented agreement
❑ Objective
✓ To facilitate cross-border paperless trade (data exchange) among
willing ESCAP member states by providing a dedicated
intergovernmental framework to develop legal and technical
solutions
✓ Complementary to the WTO Trade Facilitation Agreement (TFA) as well as (sub)regional efforts
2012 2013 2013 - 2016 19 May 2016
Framework Agreement on the Facilitation of Cross-Border Paperless Trade in Asia and the Pacific (CPTA)
❑ 4-year step-by-step development process
✓ Over 30 countries directly involved in finalizing the treaty text in March
2016, including adopting ESCAP resolutions 68/3 and 70/6
❑ Adopted by the Commission as a UN treaty (resolution 72/4) in
May 2016
❑ The CPTA enters into force on 20 February 2021.
2013Expert Review &
Member Consultations
2013 - 2016Negotiation & Finalization
19 May 2016Adoption by the
Commission
Progress
20 February 2021
Enter into force
2012Regional
Study
CPTA: Milestones in Progress
CPTA: Current Status
❑ Five countries ratified/acceded (as of November 2020)
✓ Azerbaijan, Bangladesh, China, Islamic Rep. of Iran, the Philippines
❑Signed: Armenia and Cambodia
❑Several countries undergoing domestic accession processes
❑Implementation plan on the way
✓ Draft road map for implementation
✓ Legal and Technical Readiness checklists
CPTA: Contents
Preamble
Articles 1 to 16: Substantive clauses
Article 1: Objective
Article 2: Scope
Article 3: Definitions
Article 4: Interpretation
Article 5: General principles
Article 6: National Policy Framework, Enabling Domestic Legal Environment and Paperless Trade Committee
Article 7: Facilitation of Cross-border Paperless Trade and Development of national Single Window(s)
Article 8: Cross-border Mutual Recognition of Trade-related Data and Documents in Electronic Form
Article 9: International Standards for Exchange of Trade-related Data and Documents in Electronic Form
Article 10: Relation with Other Legal Instruments Enabling Cross-Border Paperless Trade
Article 11: Institutional Arrangements
Article 12: Action Plan
Article 13: Pilot Projects and Sharing of Lessons Learned
Article 14: Capacity Building
Article 15: Implementation of the present Framework Agreement
Article 16: Other agreements in force
Articles 17 to 25: Final clauses
Overview of Provisions: Key Provisions
Article 1: Objective
The objective of the present Framework Agreement is to promote cross-border
paperless trade by enabling the exchange and mutual recognition of trade-related data
and documents in electronic form and facilitating interoperability among national and
subregional single windows and/or other paperless trade systems, for the purpose of
making international trade transactions more efficient and transparent while
improving regulatory compliance.
http://www.unescap.org/resources/framework-agreement-facilitation-cross-border-paperless-trade-asia-and-
pacific
Functional
Equivalence
Non-discrimination
of the use of Electronic
communications
Technological
neutrality
Promotion of
interoperability
Improving
transboundary
trust environment
Cooperation between
the public and
private sectors
Improved trade facilitation
and regulatory compliance
General
Principles
Ⅱ
Ⅲ
Ⅳ
Ⅴ
Ⅵ
Ⅶ
Ⅰ
Article 5: General Principles
1. The Parties shall provide for mutual recognition of trade-related data
and documents in electronic form originating from other Parties on the basis
of a substantially equivalent level of reliability.
2. The substantially equivalent level of reliability would be mutually
agreed upon among the Parties through the institutional arrangement
established under the present Framework Agreement.
3. The Parties may enter into bilateral and multilateral arrangements to
operationalize cross-border mutual recognition of trade-related data and
documents in electronic form, in a manner consistent with the principle of the
transboundary trust environment and all the other general principles, provided
that the provisions of these bilateral and multilateral arrangements do not
contradict the present Framework Agreement.
Article 8: Cross-border mutual recognition of trade-related data and
documents in electronic form
Overview of Provisions: Cross-border mutual recognition
Article 11: Institutional arrangements
1. The United Nations Economic and Social Commission for Asia and
the Pacific (ESCAP) shall, for the purposes of the present Framework
Agreement, establish a paperless trade council comprising one (1) high-level
nominee from each Party. The Council shall meet upon request but at least
once a year.
2. In the performance of its functions, the Paperless Trade Council shall
be supported by a standing committee, which shall supervise and coordinate
the implementation of the present Framework Agreement and submit its
recommendations to the Council for review. The Standing Committee shall be
composed of senior representatives of each Party and will meet at least once
a year.
3. For the purposes of implementing the present Framework Agreement,
the Standing Committee may establish working groups which shall report to
the Standing Committee on the implementation of the related action plan
under the present Framework Agreement.
Overview of Provisions: Institutional arrangements
4. The ESCAP secretariat shall be designated the secretariat of the
present Framework Agreement and shall also be the secretariat of the bodies
established under the present Framework Agreement. It shall provide support
in coordinating, reviewing and supervising the implementation of the present
Framework Agreement and in all related matters.
5. The Council shall, by a two-thirds majority vote, adopt such rules of
procedure as may be required for the performance of its functions, including
for the Standing Committee and the Working Groups. Except as otherwise
provided for in the present Framework Agreement, decisions by the Council
shall be taken by a majority of votes cast by members present and voting,
provided that at least two thirds of the participating States are present.
6. The Council and the Standing Committee may, under their
competence determined in the rules of procedure, adopt protocols on specific
legal, technical and organizational matters. The requirements for entry into
force of any protocol shall be established in that instrument.
Overview of Provisions: Institutional arrangements (Cont’d)
Article 12: Action plan
1. The Standing Committee, under the supervision of the Paperless Trade
Council, shall develop a comprehensive action plan, which shall include all
concrete actions and measures with clear targets and implementation
timelines necessary for creating a consistent, transparent and predictable
environment for the implementation of the present Framework Agreement,
including the implementation schedules of the respective Parties. The
Parties
shall implement the action plan in accordance with the schedule, and the
implementation status of each Party shall be reported to the Standing
Committee.
2. The implementation schedule for each Party shall be developed as part
of the action plan based on a self-assessment of their readiness.
Overview of Provisions: Action plan
Article 13: Pilot projects and sharing of lessons learned
1. The Parties shall endeavor to initiate and launch pilot projects on
cross-border exchange of trade-related data and documents in electronic
form, among customs and other regulatory agencies. The Parties shall
collaborate on such pilot projects through the institutional arrangements
established under the present Framework Agreement.
2. The Parties shall report to the Standing Committee on the progress of
pilot projects to facilitate the sharing of experience and lessons learned and
to establish a collection of best practices for interoperability of cross-border
exchange of trade-related data and documents in electronic form. The
exchange of experience and lessons learned would extend beyond the
Parties to the present Framework Agreement, to the extent possible and as
appropriate, in an effort to promote paperless trade implementation
throughout the region and beyond.
Overview of Provisions: Pilot projects and sharing of lessons learned
Article 14: Capacity-building
1. The Parties may cooperate to provide technical support and assistance
to each other in order to facilitate the implementation of the present
Framework Agreement.
2. The Parties may collaborate on capacity-building through the
institutional arrangements established under the present Framework
Agreement.
3. The Parties shall give special consideration to requests from least
developed and landlocked developing countries for technical assistance and
cooperation arrangements designed to assist them in developing their
paperless trade capacity and in taking full advantage of the potential benefits
of the present Framework Agreement.
4. The Parties may invite development partners for more effective
technical and financial assistance in the implementation of the present
Framework Agreement.
Overview of Provisions: Capacity building
Overview of Provisions: Provisions for promoting cross-border interoperability
Article 9 International standards for exchange of trade-related data and
documents in electronic form
1. The Parties shall endeavor to apply international standards and guidelines in
order to ensure interoperability in paperless trade and to develop safe, secure and
reliable means of communication for the exchange of data.
2. The Parties shall endeavor to become involved in the development of
international standards and best practices related to cross-border paperless trade.
Article 10 Relation to other legal instruments enabling cross-border
paperless trade
1. The Parties may, where appropriate, adopt relevant international legal
instruments concluded by United Nations bodies and other international
organizations.
2. The Parties shall endeavor to ensure that the cross-border exchange of trade-
related data and documents in electronic form is consistent with international law
as well as regional and international regulations and best practices, as identified
by the institutional arrangements established under the present Framework
Agreement.
Article 6: National policy framework, enabling domestic legal environment
and paperless trade committee
1. The Parties shall endeavor to establish a national policy framework for
paperless trade, which may define targets and implementation strategies and
allocate resources, and a legislative framework.
2. The Parties shall endeavor to create an enabling national legislation on
paperless trade, addressing the functions of the national operators for cross-
border paperless trade, taking into consideration international standards and
best practices, if applicable.
Overview of Provisions: Provision on improving domestic paperless trade environment
3. The Parties may establish a national committee, comprising relevant
representatives of government and private sector parties, in accordance
with their domestic environment. The committee will promote a legally
enabling domestic environment for exchange of trade-related data and
documents in electronic form as well as facilitate interoperability of
cross-border paperless trade. The Parties may alternatively rely on a
similar body already functioning domestically in lieu of establishing a
separate committee and may designate that body, or an appropriate
organizational unit or working group within it, as the national committee
for the purpose of the present Framework Agreement.
Overview of Provisions: Provision on improving domestic
paperless trade environment (Cont’d)
Overview of Provisions: Provision on Single Window
Article 7: Facilitation of cross-border paperless trade and development
of single-window systems
1. The Parties shall endeavor to facilitate cross-border paperless trade by
enabling exchange of trade-related data and documents in electronic form,
utilizing the existing systems in operation or creating new systems.
2. The Parties are encouraged to develop single-window systems and use
them for cross-border paperless trade. In developing single-window systems
or upgrading existing ones, the Parties are encouraged to make them
consistent with the general principles provided in the present Framework
Agreement.
Article 15: Implementation of the present Framework Agreement
Each Party shall endeavor to implement the provisions of the present
Framework Agreement by creating a legally enabling environment and
developing the necessary technical infrastructure to facilitate the cross-border
exchange of trade-related data and documents in electronic form. The Parties
recognize that least developed and landlocked developing countries may need
technical and financial assistance to develop technical infrastructure and to
create a legally enabling environment, which are essential for facilitating the
cross-border exchange of trade-related data and documents in electronic form.
Article 16: Other agreements in force
The present Framework Agreement or any action taken under it shall not affect
the rights and obligations of the Parties under any existing agreements or
international conventions to which they are also parties.
Overview of Provisions: Other provisions
Benefits of Cross-Border Paperless Trade
Annual regional export gains: $36 bn (for partial implementation) to $257 bn (full
implementation)
Export time reduction: 24% to 44%
Export cost reduction: 17% to 31%
Total direct cost savings across all trade: $1bn to $7bn annually
Source: http://www.unescap.org/resources/estimating-benefits-cross-border-paperless-trade
Overall Average Impact on Trade Costs of Different
TF Implementation Scenarios
Source : ADB-ESCAP https://www.unescap.org/resources/trade-facilitation-and-better-connectivity-inclusive-
asia-and-pacific
CPTA: General Benefits
❑ Region-wide multilateral intergovernmental platform
Builds upon existing bilateral/sub regional initiatives; Supports WTO TFA implementation;
Forster harmonization and minimize necessity for numerous bilateral/sub regional
intergovernmental approach;
❑ Strong capacity building programme
Inclusive initiative, open to Asia-Pacific countries at all levels of development; Strong
emphasis on knowledge sharing and CB/TA among parties
❑ Pilot projects
Allow parties to adjust their systems before engaging in actual cross-border trade data
exchange
❑ Action Plan
Allow parties with different implementation level to set actions based on their respective
readiness
❑ Mutual recognition
Commit to the goal, while allowing flexibility in how to materialize the goal
CPTA: Contribution in the Context of WTO TFA
Implementation
The CPTA complements WTO TFA and helps implementation of several
provisions of the WTO TFA in an efficient and value-added manner with its
ICT-based implementation approach (paperless trade).
WTO TFA Provisions supported by the CPTA
ARTICLE 1: PUBLICATION AND AVAILABILITY OF INFORMATION
ARTICLE 7: RELEASE AND CLEARANCE OF GOODS
ARTICLE 8: BORDER AGENCY COOPERATION
ARTICLE 10: FORMALITIES CONNECTED WITH IMPORTATION, EXPORTATION AND
TRANSIT
ARTICLE 11: FREEDOM OF TRANSIT
ARTICLE 12: CUSTOMS COOPERATION
“It is expected to provide countries of Asia and the Pacific with a new tool and “digital” complement
for better implementation of the WTO Trade Facilitation Agreement (TFA) and the development of
cross-border e-commerce.”
CPTA can also contribute to WTO negotiation on
e-commerce: WTO Joint Statement on Electronic Commerce
Source: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/L/1056.pdf&Open=True
CPTA Commitment Implications
Implementation of substantive provisions
• Most provisions are best endeavor
• Implementation is self-phased, based on assessment of national
readiness
• Implementation support is possible from other parties and the
secretariat through capacity building mechanism
• Focal office can handle multiple related matters, not only
implementation of CPTA
Budget implication: Mainly for participation in related meetings
• Paperless Trade Council
• Standing Committee
• Working Groups
❑ Helps/facilitates societies to transition into knowledge-based economy
with wide application of information and communication technologies
(ICTs) in international trade transactions
❑ Network effects to also stimulate other related sectors (like logistics and
other service industries) to move into knowledge-based economy
❑ Improved transparency, safety and security in international trade
transactions
❑ Improved trade efficiency and competitiveness (lower cost and less time)
❑ Chance for enhancement of human capacity with capacity building
opportunities (trainings, workshop, knowledge-sharing, pilot projects, etc.)
❑ More chance to get support from development partners in developing
hard and soft infrastructure for international trade transactions
❑ Improvement of external image and recognition from other countries
Potential Advantages
❑ Social implication: facilitate transition into knowledge-based society
through improved application of information and communication
technologies (ICTs), including infrastructure and services
❑ Economic implication: Less time and cost for trade transactions,
resulting in improved trade efficiency, higher government revenue from
higher regulatory compliance, reduced trade mis invoicing and
associated illicit financial flows
❑ Cultural implication: No implication
❑ Environment implication: reduction of use of papers, resulting in
improved environmental protection
❑ Political implication: No implication
Social, Economic, Cultural, Environmental
and Political implications
Article 18: Procedure for signing and becoming a Party
1. The present Framework Agreement shall be open for signature by
ESCAP member States at United Nations Headquarters in New York from 1
October 2016 to 30 September 2017.
2. ESCAP member States may become Parties to the present Framework
Agreement by:
(a) Signature, followed by ratification, acceptance or approval; or
(b) Accession.
3. Ratification, acceptance, approval or accession shall be affected by the
deposit of an instrument with the Secretary-General of the United Nations.
Procedure for Becoming a Party: Provision in the CPTA
❑ A State may generally express its consent to be bound by a treaty by
depositing an instrument of accession with the depositary (see article 15
of the Vienna Convention 1969).
❑ Accession has the same legal effect as ratification, acceptance or
approval. However, unlike ratification, acceptance or approval, which are
preceded by signature to create binding legal obligations under
international law, accession requires only one step, namely, the deposit of
an instrument of accession.
Procedure for Becoming a Party: Accession
Source: Annex 5, UN Treaty Handbook
(https://treaties.un.org/Pages/Resource.aspx?path=Publication/TH/Page1_en.xml)
Procedure for Becoming a Party:
Model instrument of accession
More Information: FAQ on the CPTA
1. Why was the Framework Agreement on the Facilitation of
Cross-border Paperless Trade in Asia and the Pacific (CPTA)
prepared?
2. Why the agreement at regional level?
3. Does the FA duplicate the efforts of other regional
initiatives such as APEC and ASEAN?
4. What are the benefits of the CPTA to my country?
5. How was the text of the CPTA developed?
6. Which agency should play a leading role in cross-border
paperless trade facilitation?
7. What does the text of the CPTA contain?
8. What is the nature of the CPTA?
9. To what areas is the CPTA applied?
10. What are key features of the CPTA?
11. What is the relationship between the CPTA and the WTO
Agreement on Trade Facilitation?
For more information: https://www.unescap.org/sites/default/d8files/knowledge-
products/FAQ%20on%20the%20Framework%20Agreement_Dec%202020.pdf
More Information: FAQ on the CPTA (Cont’d)
12. What is the relevance of the CPTA to Least Developed Countries (LDCs) and Land-Locked Developing Countries (LLDCs)?
13. What are the obligations of parties?
14. What are conditions for entry into force of the CPTA?
15. What actions would follow entry into force?
16. What would be covered in the action plan?
17. What is the timeline to achieve cross-border paperless trade in Asia-Pacific?
18. If I become a party, do I have to exchange electronic data and information with all other parties?
19. How will my country benefit from becoming a party at an early stage?
20. What are possible negative impacts of the CPTA?
21. Do I need to fulfill technical and legal requirements to become a party to the CPTA?
22. Who would sign an instrument for the CPTA from my country?
For more information: https://www.unescap.org/sites/default/d8files/knowledge-
products/FAQ%20on%20the%20Framework%20Agreement_Dec%202020.pdf
More information: Webpage on the CPTA
http://www.unescap.org/resources/framework-agreement-facilitation-cross-border-paperless-trade-asia-and-
pacific
More Information: Related tools and resources
• Readiness Assessment Guide for Cross-
border Paperless Trade
• https://readiness.digitalizetrade.org/
• Cross-border Paperless Trade
Database (CBPT DB)
• https://www.digitalizetrade.org/
• United Nations Network of Experts for
Paperless Trade and Transport in Asia and
the Pacific (UNNExT)
• https://unnext.unescap.org/